Luxury car tax: determining a vehicle’s principal purpose

The ATO recently explained how to determine the principal purpose of a car for ‘luxury car tax’ (‘LCT’) purposes (since LCT is not payable on the supply or importation of cars whose principal purpose is the carriage of goods rather than passengers).

Broadly, a luxury car (i.e., a car subject to LCT) is a car whose LCT value exceeds the LCT threshold. However, a commercial vehicle that is not designed for the principal purpose of carrying passengers is specifically excluded as a luxury car.

The ATO’s new determination sets out various factors to be considered in determining the principal purpose of a car, as well as factors to consider when assessing a car’s modifications.

The determination states that commercial vehicles are unlikely to have the body types of station wagons, off-road passenger wagons, passenger sedans, people movers or sports utility vehicles, and the supply of these vehicles for an amount above the LCT threshold without LCT being paid may well attract the ATO’s scrutiny.

DO YOU HAVE QUESTIONS ABOUT THIS BLOG TOPIC?

CALL (08) 9248 8124 NOW OR SIMPLY FILL IN THE FORM BELOW

"*" indicates required fields

This field is for validation purposes and should be left unchanged.

Posted in

Related

Warren Kruger

Specialist Tax Consultant - “Helping YOU Pay The Correct Tax And Not A Penny More”. My story starts on Christmas Eve, back in 1983 in South Africa.

Leave a Comment

Your email address will not be published. Required fields are marked *

Need Help With

Your Tax Return?

Complete the form below for a fast response

Scroll to Top
Call Now Button